Do I Need Flood Insurance? What You Should Know

There were about 20 separate billion-dollar weather and climate disasters in the U.S., two of which were flood events.

With intense climate events increasing in recent years, many people who live in flood-prone areas are considering insurance.

There are many different types of insurance related to flooding. Do I need flood insurance? This can make it confusing to figure out what you need or even where to get it.

To learn more about insurance that covers flooding, keep reading. This guide discusses what you should pay attention to when shopping for flood insurance.

Table of Contents

What is Flood Insurance?

Flood insurance is a type of property insurance that can help you recover from a flood.

Flood insurance covers damage caused by flooding, including water that enters your home through the foundation, windows, or doors. It does not cover damage caused by rain or wind.

If you live in an area that is prone to flooding, or if your home is in a designated flood zone, you may be required to purchase flood insurance.

Even if you are not required to carry flood insurance, it is still a good idea to do so if you live in an area that is at risk for flooding. In fact, nearly 20% of flood insurance claims come from properties outside high-risk flood zones.

The Cost of Flooding: How Much Does Flood Insurance Cost?

The cost of flood insurance varies depending on a number of factors, including the value of your home, the location of your home, and the amount of coverage you need.

Additionally, the cost of flood insurance may be affected by government subsidy programs.

According to the National Flood Insurance Program, flood insurance premiums have averaged around $700 per year in the past. If you’re required to purchase flood insurance by your mortgage lender, your premium will likely be higher

Click for more information on flood insurance prices in Colorado.

The Benefits of Flood Insurance

While some people believe that flood insurance is unnecessary, the benefits of this type of insurance policy can be substantial. For one, flood insurance can include peace of mind, knowing you are covered in the event of a flood.

Additionally, flood insurance can also help to cover the costs of any damages that occur as a result of a flood and it can also help to provide financial assistance in the event that you need to evacuate your home or business due to a flood.

What Are the Risks of Not Having Flood Insurance?

If you don’t have flood insurance and your home is flooded, you will have to pay for the repairs and replacement of any damaged or destroyed items out of your own pocket.

Not only will you have to pay for the flood damage to your home, but you may also be required to pay for a new place to live while your home is being repaired.

If you can’t afford to do this, you may have to sell your home or take out a loan to pay for the repairs.

What Does Flood Insurance Cover?

Flood insurance will cover a few different types of flood-related water damage. Here are a few floods that flood insurance covers:

Flash Flooding

This is the most dangerous type of flooding, as it can occur with little to no warning. Flash floods can cause extensive damage to homes and businesses, and can even lead to fatalities.

River Flooding

This type of flooding occurs when rivers or streams overflow their banks. River flooding can be especially destructive, as the water can be very deep and fast-moving.

Coastal Flooding

This type of flooding occurs when high tides and/or strong storms cause water to surge onto the shore. Coastal flooding can damage or destroy homes, businesses, and infrastructure.

Flood insurance covers damage to your home and personal belongings caused by flooding. It does not cover damage caused by storms, such as hurricanes and tornadoes.

How to Get Flood Insurance

While homeowners insurance covers damage from most natural disasters, it typically excludes damage from floods. That’s why it’s important to have separate flood insurance if you live in an area at high risk for flooding.

If you think you need flood insurance, contact your insurance agent or company to see if they offer it. If they don’t, you can purchase a policy through the National Flood Insurance Program (NFIP). You can also shop around for a private flood insurance policy.

If you’re renting, you may be able to get flood insurance through your landlord’s policy.

Tips for Shopping for Flood Insurance

If you live in a high-risk area for flooding, or your home is located in a Special Flood Hazard Area (SFHA) as determined by the Federal Emergency Management Agency (FEMA), you are required to have flood insurance.

When shopping for flood insurance, it’s important to know that there are two types of flood insurance policies: Standard Flood Insurance Policies (SFIPs) and National Flood Insurance Program (NFIP) policies.

Standard Flood Insurance Policies are offered by private insurance companies and cover building structures and personal contents. National Flood Insurance Program policies are offered by the federal government and only cover building structures, not contents.

It’s also important to know that flood insurance policies have a 30-day waiting period before they go into effect, so if you’re buying a policy in anticipation of a storm, it likely won’t provide any coverage.

What Are the Odds of My Home Flooding?

There is a greater chance of flooding today than there was 100 years ago. Climate change has increased the odds of extreme weather events, and more people are living in flood zones.

While the odds of your home flooding are low, the cost of flood damage is high. So, if you’re a homeowner, it’s important to take steps to protect your home from flood damage.